Two State Reps. Call For Transparency Within MCCA


LANSING — As Gov. Rick Snyder spoke today on no-fault auto insurance reform, State Reps. Phil Cavanagh, D-Redford, and Mike Callton, R-Midland, introduced bi-partisan legislation on transparency within the Michigan Catastrophic Claims Association. The bills, House Bills 4543 and 4551, call for the MCCA to open their books and their meetings to the public.

In March,  the Insurance Commissioner for the State of Michigan testified at the House Insurance Committee that the MCCA is facing a 30 year projected $2 billion deficit related to existing claims, yet they currently have a reserve of over $14 billion that is expected to reach over $16 billion by June 2013. A few days after this testimony the MCCA again raised rates on Michigan’s drivers, hitting them with a 6 percent increase beginning July 1, forcing them to pay $186 per vehicle per year.  Last year the MCCA hit drivers with a 20 percent increase, all of which is being done behind closed doors with no real explanation to the public.

“The MCCA is funded by the public’s money yet rates are set behind closed doors,” Cavanagh said. “They hire their own auditors whose conclusions are favorable to the MCCA at the expense of the motorist. We are not even sure what the MCCA allows their auditors to audit. We are forced to pay this charge.  We need to shine a light and open up this agency now that have raised the rates again for the second year in a row.”

In June of 2011, Cavanagh introduced similar bills to the ones he and Callton have introduced this session, but they sat in the House Committee on Insurance seeing no action.  “An organization like this that has the ability to charge Michigan driver’s fees should be held accountable and show that the fees are necessary,” Callton said.

The MCCA board is comprised of representatives from the state’s largest auto insurance companies who determine the MCCA fee every year. It has risen from $3 per vehicle at its creation in 1978 to the current proposed $186. The MCCA argues that it is transparent and information can be found on their website; yet they still argue it is not a government agency and therefore is not subject to the Open Meetings Act or the Freedom of Information Act. The MCCA has been the subject of many lawsuits for their lack of transparency and still fight to keep the public in the dark.